Nearly three quarters of 401(k) plans include target date funds in their investment line-up at year-end 2011, new research show.
The Employee Benefits Research Institute, Washington, D.C., arrives at this conclusion in a report on 401(k) plan asset allocation, account balances and loan activity.
The report reveals that at year-ended 2011, 13 percent of the assets in the EBRI/ICI 401(k) database was invested in target-date funds and 39 percent of 401(k) participants held target-date funds. Also known as lifecycle funds, these funds are designed to offer a diversified portfolio that automatically rebalances to be more focused on income over time.
The bulk of 401(k) assets continue to be invested in stocks, the report adds. ON average, at year-end 2011, 61 percent of 401(k) participants' assets were invested in equities through equity funds, the equity portion of balanced funds and company stock. Thirty-four percent was in fixed income securities, such as stable-value investments and bond and money funds.
